ARIF HABIB COMMODITIES (An Arif Habib Group Company) April...
Transcript of ARIF HABIB COMMODITIES (An Arif Habib Group Company) April...
ARIF HABIB COMMODITIES
(An Arif Habib Group Company)
April, 2013
Arif Habib Group serves over 100,000 local /international clients base
Our success factors include continuous investment in Intellectual Capital, strong IT Strategy, capacity building and insistence on Best Practices
• The Arif Habib Group ranks amongst the largest and oldest financial services in Pakistan today
• Managing assets in excess of PRs. 37 billion (US$ 617 million), the Group holds interests in the securities & commodities brokerage, investment and financial advisory, investment management, commercial banking, commodities, private equity, cement and fertilizer industries
Why Arif Habib
Commodities?
We are a wholly owned
subsidiary of Arif Habib
Limited. We are one of
the top most and oldest
broker registered with
Pakistan Mercantile
Exchange. We stand
amongst the pioneers of
the country’s commodity
brokerage industry.
Industry Leaders
Professionals Team & Qualified Analysts
Round the Clock Superior Service (5am-2am)
Research on range of commodities including Agriculture, Precious Metals, Base Metals and Energy
Daily Research, SMS Alerts and Regular Trading Calls
Online & Offline Trading
Lowest commission starting with Rs.25. We offer Account Opening from Rs.25,000/-
Minimum margin requirement at 4.25%
Customized market watch for PMEX
Strong Relationship Management
Focused Investor Education
Pakistan Mercantile
Exchange (PMEX) –
technology driven, de-
mutualised, on-line
commodity futures
exchange in Pakistan
Trades Regulated by
SECP with No Credit
risk
Pakistan’s first and only Commodity and Futures exchange –operational since Apr 2007
Active Contracts at PMEX are Gold 1, 10, 100 Troy Ounce, Silver 10, 100, 500 Troy Ounce and Crude Oil 10, 100 Troy Ounce. TOLAGOLD Physical Delivery. Other Contracts include Sugar, Wheat, Rice , Palm Oil
3 Contracts trade at a point of time for futures. E.g.
Dec, Jan, Feb
First Physical Gold Delivery in Aug 2007 5 Contracts for Spot Mon, Tue, Wed , Thurs, Fri
Biggest Exchange of Pakistan in terms of Traded Volumes by Jun 2010. Daily Traded Value has crossed Rs.8bn between 2011-12
Guaranteed Settlement on T+0 basis
Contract Expires on Last Friday of Preceding Month
Category of Investor in Futures Markets
Financial Institutions
Agricultural - Farmers
Industries
Individual/Retail Investors
Government
Suppliers discover information about future prices of commodities
Speculators
Hedgers to transfer risk to some other party
Arbitrageurs to take advantage of price difference in different markets
Categories of traders in Futures Markets
Hedgers
Producers – Farmers
Consumers – Refineries, Food processing companies
Speculators
Institutional proprietary traders
Brokerage Firms
Spot Commodity traders
Hedge funds
• Supplier
Farmers, miners, oil producers etc
Arbitrageurs
Brokerage Firms
Investors
Pakistan Commodity
Exchange trade in
Spot/Futures
A market in which multiple buyers and sellers trade commodity -linked contracts on the basis of rules and procedures laid down by the exchange.
This includes:
Spot trade for immediate delivery of the commodity (Physical)
Forward contracts (Off Market)
Futures trading (Through Exchanges)
Market takes global perspective in to account to determine prices including Global Financial Crises, EU Stability, World Economic Growth Forecasts, Employment Data, Interest rate environment, US Dollar/Euro Parity, Safe Haven, Ease of Access and Central Bank/Government actions
Pakistan Mercantile Exchange (PMEX) provides Overnight Liquidity and Currency Risk Hedge at no cost
Biggest Exchange in terms of Membership
Investment Portfolio diversification
Best Risk Management Practice in the country
100% institutional shareholding
Low cost of trading starting with Rs.25 in Gold, Rs. 45 in Silver
and Rs35 in Crude Oil
Low Margins - High leverage with no cost (In Gold 22 times,
Silver and Crude Oil 13 Times)
Hedging against Inflation/ Arbitrage with other exchanges
Highly liquidity and Idle Balances earn interest
Pakistan Mercantile Exchange –Products
International Commodities – Most traded on PMEX
Gold – 1 ounce contract (5 Year return over 200%, 3Year return over 100%, 5 Year Annual Return over 31% upto 2012 in rupee terms)
Crude Oil – 10 barrel contract (17% 5 Year Annual Return in Rupee Terms)
Silver-10/100 ounces contract (28% 5 Year Annual Return in Rupee Terms)
Domestic Commodities
IRRI-6 Rice/Wheat/Sugar/Palm Oil Futures Contract
Financial Futures
KIBOR Futures Contract
Pakistan Mercantile
Exchange– Trading Value
traded over Rs.118bn by
August 2011(6-fold growth in
one year’s time)
Contracts traded 110,000 on
average during 2011-12(160%
YoY increase)
Pakistan Mercantile ExchangeBenefits of diversification - an illustration
USD/PKR KSE100 Gold Silver Crude
USD/PKR 1 -0.02 0.56 0.02 -0.20
KSE100 1 0.46 0.70 0.67
Gold 1.00 0.74 0.21
Silver 1 0.67
Crude 1
Returns* 0.5% 14.6% 22.2% 71.2% 15.1%
Inflation adj.* -12.4% 1.8% 9.3% 58.3% 2.2%
Diversifying portfolioCorrelation Matrix
*based on relative returns average since Jul-2010 to Dec-2011
PMEX Trading ProceduresOnline Trading
Market Timings: 5AM to 2AM
Contract Period: Physical Delivery: Upto 7 Days, Cash Settled Contracts: 30, 60, 90 days
Order Placement: Investor completes and delivers Account opening form along with check (Online fund transfer facility) to obtain Login ID and Password from Arif Habib Commodities to enter main screen client trade portal of PMEX
Single Screen customized market watch along with online account statement, reporting on clearing and settlement
Investment in Gold
Used as Jewelery major
demand in India
And alternative asset major
demand by China
Currency Hedge(Average rupee depreciation stood at Annual 7.5% during 20 year period ending 2009)
Inflation Hedge (Average CPI stood 7.5% per annum and gold return over Annual 21% during 10 year 2002-2012)
Taxation(PMEX donot deduct)
Leverage at no cost(13:1 for Oil, Silver and 22:1 for Gold)
Diversification
Exposure to Global Economy
No Local Manipulation
Safe Haven
Long/Short Positions
Liquid Investment
Lack of reliable alternative assets
Hedge against uncertain future
Gold can be sold to someone outside Pakistan
Locals loosing faith in economic growth
Contact Us:Arif Habib Commodities
(An Arif Habib Group Company)60-64 Karachi Stock Exchange Building
Stock Exchange Road Karachi -74000
Commodities Help Desk:Phone: 32461104-734-2512-2598
Fax: +92 21 32462830Email: [email protected]
Website: www.arifhabibcommodities.comFollow us on
Facebook/arifhabibcommodity, Twitter/ahcommodities